Nigeria back into recession, worst since 1987

Marco Green
November 22, 2020

Oil-rich Nigeria, Africa's biggest economy, slipped into recession for the second time in four years, hit by both the coronavirus pandemic and falling oil prices, official figures revealed Saturday.

The oil sector contracted by 13.89% in the third quarter against growth of 6.49% in the same period a year earlier, according to data cited by Kale, while the non-oil sector shrunk by 2.51% in the three-months to September.

According to NBS, cumulatively, the economy has contracted by -2.48 per cent.

"Furthermore, growth in Q3 2020 was slower by 5.90% points when compared to the third quarter of 2019 which recorded a real growth rate of 2.28% year on year".

In August, the NBS said that the economic decline in Q2 was largely attributable to significantly lower levels of both domestic and global economic activity resulting from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.

"As these restrictions were lifted, businesses re-opened and worldwide travel and trading activities resumed, some economic activities have returned to positive growth".

This online news platform understands that the development shows that this is the second consecutive quarterly GDP decline since Nigeria's 2016 recession. Some economic activities have returned to positive growth.

The information and communications sector contributed 9.57 per cent to total nominal GDP in Q3 2020.

"This rate was, however, lower relative to growth recorded in the third quarter of 2019 by -9.91% points but higher than the proceeding quarter by 6.19% points".

Also, it was 17.06 per cent points higher than rate recorded in the preceding quarter. "The economic growth in Nigeria, that is the GDP, could in the worst case scenario, contract by as much as -8.94% in 2020".

'This improved confidence has also manifested in PMI readings and stock market performance.

'However, the performance of the agriculture sector in real terms which came in at 1.39 per cent was disappointing. Nigeria's inflation rate is now astronomic evidenced by the high prices of commodities in the market.

"We look forward to coming to Nigeria to identify with viable businesses that the United Kingdom government could partner with in generating real and long term benefits for both countries", she said.

Other reports by Click Lancashire

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